Hall Monitor’s Spring Council Session Wrap-Up (Part I)

The Spring 2023 Session of Philadelpha Cicy Council ended last week. Here is a look at some of the biggest stories from the last few months.

February 17, 2023: Office of Public Safety Director Proposed

Philadelphia City Council President Darrell Clarke introduced (via Majority Leader Curtis Jones) legislation that would change the city charter to create the Office of Chief Public Safety Director.

According to a press release issued by the Council President’s office, the office would be responsible for “ensuring public safety by coordinating resources with various city agencies, including Police, Prisons, Recreation, and other departments.”

“We know we need better coordination and collaboration in how Philadelphia departments and agencies respond to gun violence,” Clarke said via press release. “A Chief Public Safety Director – whose chief responsibilities include fostering better collaboration among all relevant agencies in our city – is a policy initiative well worth trying.”

The position would coordinate efforts and resources among various city agencies and would perform the following functions:

Operational Guidance. The Director shall provide relevant City agency leaders with guidance and initial approvals of operational policies, work programs, and budgetary policies. The Director shall provide consultation on the budgets of safety-related departments and agencies.

Evaluations. The Director shall prepare reports regarding public safety measures as directed by the Mayor. When necessary, they shall undertake studies related to public safety functions, evaluating the effectiveness of work programs and procedures of safety-related City departments.

City Facility Security. The planning and implementation of security in all City-owned facilities shall be overseen by the Director (i.e., all municipal offices and facilities, recreation spaces, and school district buildings). Additionally, all City and School District contracts for security services are to be developed and overseen by the Director.

Relationship Maintenance. The Director shall establish and maintain cooperative relations with civic and business organizations, schools, court offices, emergency services in other jurisdictions, and others interested in the maintenance of public safety.

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February 24, 2023: Council President Clarke Announces Retirement

City Council President Darrell Clarke announced he would not seek reelection to his 5th District council seat, which he has held since 1999.

Clarke’s announcement comes at a time of significant change to the membership of council, with five members exiting the body to run for mayor, and another because of corruption. Four members were first elected in 2019. In council’s next term, more than half of the membership will have one term or less of experience.

Clarke addressed reporters in the Caucus Room across from the City Council chambers after the regular meeting of council.

“I will be around for the next ten months as the council president working with my colleagues moving the agenda for the city of Philadelphia, and probably in even more aggressive ways than we have in the past,” Clarke said.

Clarke said being a councilmember is the most privileged job one can have, due to the contact councilmembers have with their constituents.

Calling the decision not to seek reelection one of the most difficult he ever had to make, Clarke recounted his time in council, from his days as a staffer, succeeding John Street as councilmember for the 5th District, and eventually taking over the council presidency from Anna Verna.

In a statement released by Council President’s office, Clarke touted the following accomplishments:

Affordable Housing and Neighborhood Preservation.

In 2019, Council created the $400 Million Neighborhood Preservation Initiative, a comprehensive program to build 1,000 affordable homes for sale in neighborhoods across Philadelphia. NPI is also making investments in programs that help homeowners repair existing homes; assist first-time homebuyers with closing costs; untangle tangled titles to help homeowners build generational wealth; invest in neighborhood commercial corridors to spur economic development, as well as resources to help renters avoid evictions and provide housing for the homeless.

Reforming Government & Improving Efficiencies.

Clarke authored Charter change legislation that realigned city agencies to create more efficiencies in local government, including the creation of a new Office of Planning & Development.

Poverty Reduction.

From 2020 to 2022, Council has invested over $30 Million to create and fund a Poverty Action Fund, a public-private partnership to begin lifting 100,000 Philadelphia residents out of poverty. In a 2020 inauguration speech, Clarke called the anti-poverty initiative Council’s “Moonshot”.

Violence Prevention and Public Safety.

Council has invested over $200 Million in violence prevention strategies over the last several years, including more than $22 Million in community-based organizations in neighborhoods hit hardest by gun violence. Under President Clarke’s leadership, City Council has sought relief in the Pennsylvania courts from the state legislature’s refusal to either pass stronger state laws against illegal guns or to allow cities like Philadelphia, Pittsburgh and others to approve their own local gun laws. A lawsuit against the legislature is pending in Commonwealth Court.

Public Education Funding.

Under Council President Clarke, Council has steadily voted to increase city funding for the School District of Philadelphia – particularly in the wake of devastating state budget cuts in education funding between 2011 and 2014. Under Council’s leadership, the City has increased local funding for the School District by 62.1%, making it about even with what the state contributes. Clarke sponsored legislation leading to abolition of the state-controlled School Reform Commission and a return to local control of Philadelphia public schools.

Tax Relief for Homeowners & Property Owners.

Clarke and Council approved a series of tax relief and remediation measures to protect homeowners when the city implemented a citywide reassessment of properties. A 2015 Pew report found that Council’s tax relief measures successfully protected longtime homeowners in neighborhoods that experienced sharp property value increases from being taxed out of their homes.

Energy, Sustainability & Jobs.

The Philadelphia Energy Campaign, led by the Philadelphia Energy Authority, is leveraging a $1 billion investment in sustainability programs to create 10,000 jobs over 10 years, and support job training and local, inclusive hiring. The Energy Authority was created under legislation proposed by Clarke, and as President he has significantly expanded the Authority’s mission to include Solarize, an affordable residential solar energy program, as well as a partnership with the School District of Philadelphia to reduce energy costs in school facilities.

Modernized City Council’s Staff & Technical Abilities.

City Council’s technical staff has been modernized, enabling Councilmembers to better develop data-driven solutions to serve their constituents in a rapidly-changing city. During unprecedented challenges posed by COVID-19, Council increased transparency and public access through its use of technology, and maintained Council’s regular operations.

March 3, 2023: Mayor Kenney Delivers His Final Budget Address

Philadelphia Mayor Jim Kenney delivered his eighth and final budget address to Philadelphia City Council. The $6.1 billion operating budget, the largest in city history, makes new investments in education, violence prevention, and anti-poverty measures.

The budget presented to council is comprised of two components; the operating budget and the capital budget. The operating budget is the funding for day-to-day city activities, such as salaries and benefits for city employees.

The capital budget is for long-term expenses, primarily building and city infrastructure maintenance. FY 2024’s capital budget is $3.72 billion.

Kenney highlighted education, public safety, racial equity, poverty reduction, housing, and infrastructure as his top priorities when crafting the budget.

Kenney specifically touted the following components of the 2024 budget:

$282 million contribution to the school district
$233 million for gun violence prevention
$11.6 million for Catto Scholarships
$47.5 million for Rebuild
$37 million to expand library service to six days per week
$2.5 million for expanded street sweeping
$4 million to combat illegal dumping
$5 million to clear criminal justice-related debts
$29 million over five years for eviction prevention
$6.7 million over five years for 100 housing units for homeless people
$3.2 million for tiny homes
$20 million for FDR park improvements

Kenney also committed $62 million for fare-free transit for 25,000 Philadelphians subsisting below the poverty level, and will spend $9 million to provide free transit to city employees.

This budget also reduces the city’s two largest taxes; the Resident Wage Tax will be cut from 3.9% to 3.7565%, and the Business Tax will see a drop from 5.9% to 5.83%. Even with the proposed reduction, the Wage Tax will still generate $1.759 billion in revenue, an increase of $50 million from FY 2023’s projections. The Business Tax, however, is expected to bring in $20 less than what was projected in 2023.

The $6.1 billion budget consists of $5.99 billion in revenues, and $391 million in American Recovery Plan funds, with a fund balance of $524 million.

Councilmember Kendra Brooks released a statement praising certain aspects of the budget, including expansion of the Catto Scholarship, extending hours at libraries and recreation centers, quality-of-life and safety issues.

However, Brooks expressed concern regarding other areas of the budget, specifically a lack community development, and lamenting funding shortfalls for various city departments, and particularly decrying the proposed tax cuts.

“Cuts to the BIRT and wage taxes will deliver negligible savings for working families, while resulting in windfalls for our wealthiest residents and corporations,” Brooks said. “Trickle-down tax cuts for the ultra-rich deprive our city of essential revenue and make it impossible for us to deliver the fully-funded neighborhood services and programs that lift people out of poverty, reduce violence, and stabilize communities.”

March 24, 2023: Budget Hearings Begin

This week, City Council began the city’s annual budget hearings. The budget process begins with the Mayor’s budget address, typically given at the beginning of March, and goes through the entire spring session of council, culminating with passage of the budget in June.

Once passed, the budget takes effect on July 1st, the beginning of the fiscal year. Each year, there seems to be certain themes that emerge throughout the process. This year, we expect to hear about the ongoing violence epidemic in the city, property assessment issues, and how the budget surplus should be used.

Budget hearings are usually held twice per week and divided into two sessions, one in the morning and one in the afternoon. This week, Monday’s hearing was dedicated generally to the Administration, and Tuesday’s hearing was the city’s financial departments.

A key concern of Council President Darrell Clarke is the continued funding of the Neighborhood Preservation Initiative, a $400 million program funded by the issuance of municipal bonds. The plan calls for the city to borrow $100 million in four successive years to fund the program. Currently, the city has borrowed $200 million.

Clarke is urging the city to borrow the third traunch of the $400 million early, so as to ensure the program remains funded regardless of how the incoming administration views the project. The drawback from the administration’s point of view is the yearly fees associated with borrowing. If the money is borrowed but remains unspent, the city will be paying between $7-9 million in fees for money sitting in a bank account.

Day Two of the budget hearings proved to be a little more lively, as council members focused on taxes and the Office of Property Assessment (OPA).

Regarding taxes, council seems to have a mixed opinion on the reductions proposed by the administration. Some members feel tax reductions send the right message to the business community, while others question the effect reductions have on smaller businesses.

The current Five-Year Plan calls for steady tax reductions throughout, with cuts beginning this year. City Finance Director Rob DuBow said reducing the Business Tax (BIRT) and the Wage Tax makes the city more competitive and helps attract jobs, as opposed to when the city was raising taxes.

“(Raising taxes) cost us tens of thousands of jobs,” DuBow said. “We also know the Chamber (the Philadelphia Chamber of Commerce) was really supportive of the decreases last year and said that would be really important in terms of attracting and retaining businesses.”

However, other council members were skeptical of the tax cuts having a truly positive effect.

Councilmember Kendra Brooks explained how the BIRT tax cut would cost the city over $75 million in the next five years.

“This is 75 million that we cannot spend to protect our school children from expenses to clean our streets and to combat violence in our neighborhoods,” Brooks said.

Brooks also questioned the wisdom of tax cuts that seem more likely to benefit larger corporations like Comcast, rather than smaller businesses across the city.

“But most (of the BIRT tax cut) is going to mega-corporations like Comcast who stand to gain hundreds of thousands of dollars in tax cuts, while most small businesses will only get a few dollars,” Brooks said.

Brooks also raised concerns with the Wage Tax cuts, explaining that the average worker saved 75 cents per paycheck while the wealthiest Philadelphians kept thousands of dollars per year. The proposed cuts in this year’s budget and Five-Year Plan will likely cost another $75 million in revenue.

Councilmembers Jamie Gauthier and Cindy Bass vigorously questioned the Office of Property Assessment regarding last year’s property assessments and the methodology employed to develop the assessment formula.

Gauthier raised concerns regarding inconsistent assessments in Black and Brown neighborhoods, particularly her own Third District.

“I see Third District neighborhoods of color getting assessed much higher than other comparable neighborhoods of color and other parts of the city,” Gauthier said. “My district is 75%, black, and saw the most homeowners with assessments that went up by more than 50%”

Gauthier called for identifying racial bias in the assessment process.

Councilmember Cindy Bass went a step farther, calling out OPA for not having a sense of urgency when it was realized Black and Brown communities seemed to be facing higher assessments than their non-Black and Brown counterparts.

“I want to say it’s a problem, but it’s way bigger than being a problem,” Bass said. “It’s a mindset. It’s a culture that has displaced a lot of folks in the city of Philadelphia.”

Bass called for more action on the matter, telling the Administration that all councilmembers are hearing about assessments from their constituents, inviting the Administration to go door-to-door with her in the 8th Distrcit.

The Adminstration cited relief measures available to city residents, and broke down particpation in each program:

Homestead Exemption: 234,790

LOOP (Longtime Owner-Occupant Program): 14,187

Senior Citizen Tax Freeze: 19,066

Many of the themes that developed in the first week of budget hearings figures to return throughout the process, particularly with the city revenues exceeding expectations. This will likey be a lively process. Hall Monitor will bring you the key information each week.

We’ll continue our discussion of key moments from the Spring Session on Hall Monitor Radio/Television next week.

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